Vontier Corp (VNT)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Total assets | US$ in thousands | 4,294,000 | 4,343,300 | 4,349,800 | 3,073,000 |
| Total stockholders’ equity | US$ in thousands | 890,400 | 576,500 | 569,900 | 187,800 |
| Financial leverage ratio | 4.82 | 7.53 | 7.63 | 16.36 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $4,294,000K ÷ $890,400K
= 4.82
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations and growth. A higher financial leverage ratio indicates a higher proportion of debt in the company's capital structure.
Looking at the trend of Vontier Corporation's financial leverage ratio over the past five years, we can observe fluctuations in the ratio. In 2019, the financial leverage ratio was relatively low at 1.56, suggesting a conservative approach to debt financing. However, there was a significant increase in the ratio in 2020 to 16.36, indicating a substantial increase in debt relative to equity in that year.
Subsequently, there was a decreasing trend in the financial leverage ratio in the following years. In 2021 and 2022, the ratio remained high at 7.63 and 7.53, respectively, signifying a continued reliance on debt as part of the company's capital structure. By the end of 2023, the financial leverage ratio decreased to 4.82, showing a reduction in the company's debt dependency compared to the previous year.
Overall, the fluctuating trend in Vontier Corporation's financial leverage ratio suggests varying levels of debt utilization over the years, potentially reflecting changes in the company's financing decisions and strategies. It is essential for stakeholders to closely monitor this ratio to assess the company's risk profile and financial stability.
Peer comparison
Dec 31, 2023